XRP (XRP) price forms bearish descending triangle pattern on the daily chart, risking a 45% drop to $1.20

The XRP price chart has been forming a descending triangle pattern on its daily chart since its late 2024 rally

Key takeaways:

XRP is forming a bearish descending triangle on the daily chart, risking a 45% drop to $1.20.

Declining daily active addresses signal reduced transaction activity and liquidity.

A breakout above $2.18 could invalidate the bearish pattern.

The XRP (XRP) price flashes warning signs as a bearish technical pattern emerges on its daily chart, coinciding with declining network activity.

What's new in XRP price today?

The XRP price chart has been forming a descending triangle pattern on its daily chart since its late 2024 rally. A flat support level and a downward-sloping resistance line are two key components of this bearish structure.

A descending triangle chart pattern that forms after a strong uptrend is usually seen as a bearish reversal indicator. The setup typically resolves when the price breaks below the flat support level and falls by as much as the triangle's maximum height.

The bulls are struggling to keep XRP above the 50-day simple moving average (SMA), currently at $2.18, which signals a lack of strength.

If this trend continues, a close below the moving averages, namely the 50-day SMA and the 100-day SMA at $2.06, could sink the XRP/USDT pair to the psychological support level at $2.00.

If this support fails, XRP price could tumble toward the downside target at around $1.20 by the end of May, down 45% from current price levels.

This descending triangle pattern's target coincides with an earlier analysis that highlighted the possibility of a drop to as low as $1.61 if key support levels don't hold.

Conversely, a clear breakout and close above the triangle's resistance at $2.18 will invalidate the bearish structure, putting XRP in a good position to rally toward the $3.00 psychological level.

Declining network activity threatens bulls

The XRP Ledger has experienced a significant drop in network activity compared to Q1 2025. Onchain data from Glassnode shows that the network's daily active addresses (DAAs) are now far below March's peak.

On March 19, the ledger recorded a robust 608,000 DAAs, reflecting high user engagement and transaction activity. However, this metric crashed in April and early May, as shown in the chart below.

With only around 30,000 daily active addresses, user transactions have decreased, possibly signaling reduced interest or a lack of confidence in XRP's near-term outlook.

Historically, declines in network activity typically signal upcoming price stagnation or drops, as lower transaction volume reduces liquidity and buying pressure.

Meanwhile, XRP's 1.17% drop over the last 24 hours is accompanied by a 30% increase in daily trading volume to $2 billion. Trading volume increases amid a price decline can be interpreted as profit-taking or repositioning by crypto traders as they wait for XRP's next move.

Popular analyst Dom commented on the increased selling volume, pointing out that “a large amount of market selling over the last week” is why XRP failed to sustain upward moves.